Godrej, L&T, Phoenix housing projects buck slowdown in property mart

Right pricing, sizes and location did the trick, say experts

Godrej Group’s realty arm Godrej Properties launched its residential project Godrej Summit in near Dwarka Expressway in Sector 104 in Gurgaon on September 11, within a day it sold the entire first phase consisting 695 apartments of one million square feet.

In Mumbai, the L&T-Omkar joint venture got 400 confirmed bookings and 150 prospective buyers are waiting to buy in the yet to be named project in Bhoiwada, Parel area in central Mumbai. The project got the bookings in four to five days after the launch early this month.

The Rs 7000 crore project touted as one of the largest slum redevelopment project in the country has 1800 aparments and would be launched in phases.

Mumbai-based Phoenix Mills which launched its three million sq ft residential project ‘One Bangalore West’ in Rajaji Nagar in Bangalore on September 7, saw bookings for 200 units on the launch day and total bookings in the project till date stand at around
300.

Despite continued fall in home sales in Mumbai and National Capital Region, real estate projects of developers such as Godrej Properties, L&T-Omkar, Phoenix Mills seem to have bucked the trend with their projects getting record response.

The reason: Combination of right price, right size and right location and more importantly the brand names involed must have done the trick, say consultants, developers and fund managers.

“Whatever you call—lull or slowdown in the market—there is a serious demand for right product at the right price which is in right location,” says Om Ahuja, chief executive, residential services, Jones Lang LaSalle India, a global property consultant.

In Godrej’s project in Gurgaon, the developer got the sizes right and the brand name also helped, said Amit Bhagat, managing director and chief executive officer of ASK Property Investment Advisors.

“While most developers were doing 1500 to 3000 sq ft apartments in the area, Godrej launched apartments of 1300 sq ft to 1800 sq ft which was liked by buyers,” said
Bhagat.

Besides penthouses, the project had 2 bedroom apartment of 1269 sq ft, 2.5 BHK of 1446 sq ft and three BHK of 1816 sq ft. Though the company launched the apartments at Rs 5300 a sq ft, later revised it to Rs 5550 a sq ft.

Spread over 21 acres, Godrej Summit consists of 11 high rise towers and has nearly 1,200 homes across two million sq ft of space.

“Besides, buyers would have had that comfort on the loading on carpet area since it is coming from a reputed brand such as Godrej,” he added.

Though the ongoing prices in the area is Rs 5000 to Rs 6000 per sq ft, many prospective buyers saw the  project “ a steal” given its pricing of Rs 5400 to Rs 5600 a sq ft. “It is like right price at right location,” Ahuja added.

L&T Omkar JV’s project also had similar attraction. The project in South Central Mumbai also has two bed room apartments which are far and few in the premium residential projects launched by developers here.

“Lower Parel has become extended business district of Nariman Point and employees working here  saw the L&T project attractive as it is close by and had 2BHK and 3BHK at good prices,” said Ahuja of JLL.

He says when Andheri and Goregaon, the western suburbs of Mumbai, are commanding prices of 12, 000 to 18,000 respectively,” the buyers would not have mind paying little more and moving closer to where they work.”

Though L&T Omkar had launched apartments at Rs 16,000 per sq ft, the apartments would cost buyers around Rs 20,000 to Rs 22,000 given floor rises and other charges, consultants say.

“Location and L&T brand name were the main pull factors to the project,” said Bharat Dhuppar, chief marketing officer, Omkar Realtors.

Phoenix Mills was also a hit with buyers. "Our project, One Bangalore West, in Rajaji Nagar, Bangalore has the combination of location and quality, packaged together at an attractive price," says Mayank Ruia, head - residential at Phoenix Mills.

The project is close to Orion Mall and Iskon temple and located on Dr Raj Kumar Road. Though developer launched it for Rs 6550 a sq ft, now current prices are at Rs 8100 a sq ft.

“Bangalore's residential market is driven significantly by end users.  In our project, we estimate that a vast majority of apartments are sold to end users,” Ruia said.

NCR and MMR, both considered to have significant amount of investors have already slowed down. According to realty research firm PropEquity, NCR has seen a drop of 30 per cent and 50 per cent in absorption of residential units in June and July of 2012 compared to corresponding months of 2011. Mumbai Metropolitan Region has seen a dip of 28 per cent and 30 per cent in June and July 2012 respectively.